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Presented By:
Group No.7
Situational Analysis
Categorized into Apparels, Accessories, Perfume & Cosmetics, Hard luxury goods
Currently concentrated in Europe and Americas with growing demand in Asia
Two-third market controlled by 35 brands
Industry Growth hampered by global recession; down by 8% from previous year (2008)
Personalized customer service as a foundation to client retention and primary competitor differentiator
Strategy
Clocking systems
Post 2004 lawsuit, Mandated timekeeping systems and audit compliances in place
Target SPH : (Sales - sales return)/ hours worked based on hourly wage ; SA = $412
Store Managers (actual SPH) : (Total store sales sales)/ ( Total selling + non selling hours clocked in store)
Sales Associate : (Total store sales sales)/selling hours;
if actual SPH > Target SPH : 7.35% of sales in lieu of hourly pay + hourly wage * non-selling hours
Else Total hours clocked * hourly wage
Termination
Store managers prevent employees from logging in Non-selling hrs. Clocked in store reduce actual SPH of
non-selling hours managers
Class action lawsuit by SA for violating federal and state SA not compensated for overtime in accordance with
wage and hour law FLSA
Note: Sharking is also a concern in the organization but cannot be addressed through a compensation system
1. No stringent checks for non-selling activities being clocked
Problem Statement
Salary
6
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